Recently, we’ve been posting articles related to our dealings with clients in our Sydney office. There’s no denying this week’s hot topic is ‘The Budget’ or more specifically, the tax changes proposed for working holidaymakers in Australia.
A lot of our partners and clients across Australia have been contacting us on this topic, so we decided to outline the changes with all the information we have available to us.
For the moment, we don’t know any more than what has been written in the newspapers and addressed in Minister Hockey’s budget speech on Tuesday 12th May. In order to digest this fully we’ll need to wait for details to be released so we can comment on the full effect of these proposals for working holiday makers.
The good news for all working holidaymakers is that these changes will not come into effect until the 1st July 2016. Yes, that’s a full tax year away yet!
Anyone currently in Australia will not be affected and are only subject to existing rules. At the moment, working holidaymakers who spend in excess of 183 days in Australia can be deemed residents for tax purposes (*there are other criteria in meeting residency criteria but the 183 day rule is the main requirement).
Once you’re designated a resident for tax purposes, you’re eligible to avail of the tax free allowance of $18,200 and will also pay the lower rate of 19% tax on your income up to $37,000.
For full details on tax rates and how the tax system works you can refer to The Oz Tax System.
To recap, if you’re in Australia at the moment you will be unaffected by these changes in the upcoming tax year ending on 30th June 2015 and also for the tax year ending on 30th June 2016 as all the proposed changes are only effective from the 1st July 2016.
If you’ve got any questions or are concerned in any way we will be happy to assist. Please feel free to register for a call back or reach us on Freephone 1800 674 014 (within Australia) and we’ll address any of your concerns.
We’ll keep you updated as more information is released!